Radiant World is under growing pressure after two of its key banks froze its funds and major miners moved to cut ties with the iron ore trading house.

Deutsche Bank and KBC Group have frozen some of the company’s Singapore bank accounts, while some other banks have suspended credit lines, according to people familiar with the matter who asked not to be identified due to the sensitivity of the subject. The moves came after Bloomberg reported last week that some of the largest commodity-trading firms had stopped dealing with Radiant World amid concerns it provided banks with falsified documents about iron ore trades, citing people familiar with the matter.

Two of the world’s largest miners, Rio Tinto Group and Vale, have struck Radiant World off their lists of approved customers, people familiar with the matter said.

Commodity traders like Radiant World rely on credit from a wide range of suppliers, customers and financiers to handle huge quantities of goods whose value often dwarfs their own net worth. The private company grew quickly in recent years to become one of the world’s largest traders of iron ore with annual revenues of about $12-billion. Now, uncertainty about Radiant World’s business is already being felt in the iron ore market, where prices this week fell to the lowest in more than a year.

A spokesperson for Radiant World said: “Radiant World remains well capitalised with healthy liquidity, supported by a consortium of long-standing banking partners. We continue to meet our obligations to our financing and trading partners and remain well on track to deliver on our fourth-quarter targets.” He declined to comment on individual counterparties.

In response to Bloomberg’s previous coverage, Radiant World has denied wrongdoing and said it “conducts its business to the highest commercial and legal standards.”

While Radiant World is little known outside the metals industry, its scale in the iron ore market has put it at the center of a network of trade relationships involving some of the world’s top miners, traders and steelmakers. It has established ties with dozens of banks and funds that finance it through lending facilities backed by documents like invoices and shipping receipts, cash in its own bank accounts, or direct ownership of commodities in transactions known as repo financing, according to corporate filings and people familiar with the matter.

PULLED BACK
Several of Radiant World’s banks have pulled back from dealing with the company in the past week, the people said. Deutsche Bank and KBC have frozen some bank accounts while they carry out compliance reviews, the people said.

In addition, Arab Bank Switzerland Ltd., a key financier of Radiant World’s business, has stopped issuing new letters of credit for the trading house’s iron ore shipments, according to two of the people. ICBC Standard Bank Plc has suspended repo financing with the company, several additional people familiar with the matter said, also asking not to be identified discussing sensitive information.

Societe Generale SA is also reducing its exposure to Radiant World, though it began the process several months ago after becoming aware of allegations of fraud in the market, separate people familiar with the matter said.

Spokespeople for Deutsche Bank, KBC, Arab Bank Switzerland, ICBC Standard Bank and Societe Generale declined to comment.

Bloomberg previously reported that Intesa Sanpaolo and Jefferies Financial Group’s Point Bonita fund were reviewing their exposure to the company, and that Intesa had taken a provision on its exposure.

Meanwhile, several key trading counterparties are also moving to cut ties with Radiant World, according to people familiar with the matter.

Rio Tinto and Vale, the world’s two largest iron ore miners, have stopped doing new deals with Radiant World, the people said, asking not to be identified due to the sensitivity of the matter. The two miners typically supply much of their iron ore directly to steelmakers under long-term contracts but also sell additional cargoes to a relatively small group of approved trading houses in the spot market.

The miners have both removed Radiant World from those approved customer lists, the people said. Rio still has some limited pre-existing contractual commitments to fulfill to Radiant World, one person familiar with the company’s position said.

Both miners were listed in a December 2024 Radiant World presentation as being among the company’s “diverse network” of suppliers and counterparties. Other companies listed in that presentation include Glencore, Cargill, Trafigura Group, BHP Group and CSN Mineração.

Bloomberg reported last week that Cargill had stopped dealing with Radiant World several months ago and that Glencore was not entering into new business with the company. On Wednesday, Glencore CEO Gary Nagle confirmed that the company had halted new business and was “checking how to exit” its outstanding exposures.

A spokesperson for Trafigura said: “We do not trade with Radiant World.”

BHP hasn’t traded with Radiant World for at least several months, according to a person familiar with the matter, while Brazilian miner CSN hasn’t sold iron ore to Radiant World since the end of 2024, a person familiar with the matter said.

Spokespeople for Rio Tinto, Vale, BHP and CSN declined to comment.